A New School Year, A New Set of Worries

August 29th, 2014

September brings a new school year, new schools and the need for working Parents to adjust their own lifestyles and their “help” arrangements (childcare, household and so forth). As businesses double their efforts to profitably grow, and demand more involvement from their key people so understanding the value of your time, the compromises you need to make, the good judgement you need to show and the priorities you set becomes even more critical. Yet I look at many friends and acquaintances, successful executives and managers, and all I see is “fear”. Fear, expressed inwardly, as a loss of control and outwardly, as panic, frustration and high levels of tension in personal relationships. (“The boss is being unreasonable”, “They have no understanding of my life”, “I feel guilty about the impact on my kid(s) welfare” and so on)

The circumstances are very similar: Parents fretting over a change of class or school environment for their darling child, an inability to hire and fund costly childcare, an inability to better organise and manage their time, procrastination and a reluctance to pay for help. In almost all cases, their employer or boss doesn’t want to, or expect to, get involved in the solution. They are left to fend for themselves.

Executives (Sheryl Sandberg), academics and woo-woo HR experts talk about work-life balance, as if we live on two separate planets. Sorry “work-life” balance is CRAP. You have one life, which is unique. You have a certain number of hours that you are awake and are willing to be productively deployed in support of your work, job and career and the pursuit of your personal interests. For those who are up at 7am and retire to bed at 11pm, in any given week you give yourself 112 hours to accomplish what you must or want to do. You find the answers, not in a glossy book or magazine but by

  1. Determining your priorities in each area, and physically scheduling appropriate time in your diary (an electronic calendar or a paper diary).
  2. Where there are lengthy activities, breaking them up into manageable lumps of time, working backwards from your deadline to today.
  3. Where there are significant foreseen changes in circumstances (a new job, impending birth of a child, moving home, changing school, ageing Parent, chronic ill health and so on),  setting time aside to examine the impact and physically schedule time, money and other resource to take the appropriate action.
  4. Allowing sufficient “unplanned” time in your daily and weekly diary to attend to unforeseen events. The concept of scheduling “back-to-back” meetings is ridiculous. No successful person can operate like for long.
  5. Holding each other (partner, spouse or boss) to account for the results you must accomplish. That is what healthy people and relationships do.
  6. Confidently outsourcing tasks and activities that neither interest you or are a productive use of your time (routine business activities, travel, childcare, household chores and errands, tickets for special events, bookkeeping, legal, tax filing, financial advice, investments and so on).
  7. Talking to someone with highly similar circumstances (preferably not a family member), who is perhaps a few years ahead of you in age and success. Ask them for their advice, and you will be amazed how constructive that help is. They may also point you to a formal or informal network of people in similar circumstances, who have been able to resolve the issue you are wrestling with.

I laugh at people with six figure plus family incomes, who spend 2 hours online trying to save $50 on an air flight. You need to be much more conscious about the value of your time. After all you can always find new ways to raise or create more money but you cannot create more time, short of stop doing things that are boring you or are a lousy use of your time.

Profitable growth in business first places a demands on individuals that they come to terms with the impact on their own lives, they apply good judgement and they take the appropriate action.    

© James Berkeley 2014. All Rights Reserved.

Are You Thinking What I Was Thinking II

August 28th, 2014
  • The ice bucket challenge, another “fad” (like TQM, Lean, Big Data) that starts with the strand of a good idea, grows to a point in the wider public consciousness that it steadily loses its’ resonance and ends up disappearing into a vortex of dullness
  • We search for more one-of-a-kind holiday experiences that bring us closer to the great (changing seasons, unexplored oceans, diverse animals) and the bad (windstorms, disease, life-threatening interactions) of nature. Yet our beliefs about those who put themselves in harm’s way or disrupt nature have yet to adapt at the same speed. So we are shocked about shark attacks (Australia), shipwrecked pleasure craft (Indonesia) and whole countries exposed to Ebola.
  • We overvalue “potential” (Snapchat, Alibaba) and we undervalue “results” (Apple, 3M, Coca Cola)
  •  Surrounded by jihadists (Middle East), regional conflicts (Ukraine), religious civil war (Syria), earthquakes (California), and cyber attacks (JP Morgan), we are in a period of impressive financial prosperity and abundant opportunities  in many mature economies (Dow, FTSE and Hang Seng nearing or at all-time highs). You wouldn’t get that turning on the television news or flicking through most newspapers.
  • Financial analyst, Abigail Doolittle, warns that the stock market could be heading for a “scary” 60% crash without a greater impetus to raise interest rates in the G8 (sorry, G7 without our Russian friends). How many analysts, economists and forecasters get fired if their assumption is wrong? Zero. Why should we take notice if no one is held to account?
  • We have greater financial regulation, capital and human resource deployed to compliance in the financial services sector today than at any point in history. Yet we have greater incidence of alleged and actual wrongdoing (South Korean banks inter rate rigging, Wall Street banks subprime wrongdoing, RBS mortgage advice to name but several firms currently “in the dock”). Isn’t it time that those banging the drum loudest for change (politicians, the media, regulators and electorates) focus on changes that see bankers own self-interests (career development, health and well being) met in the proposed changes?
  • We lionise popstars (Bieber), models (Cara Delevigne), politicians (Obama), business executives (Prince Al Waleed) and sports stars (Beckham) way too fast and are “astonished” when their human failings tarnish our image of them.
  • Cries of alarm about excess capital (foreign or non-traditional sources) buying up businesses, real estate and so on is largely a good thing. Competition  in capitalist societies has accelerated re-invention and innovation, enabling customers and clients to buy in new ways, to access resources in new ways and enhancing our experience. Why, the alarm?
  • The “past” has seen firms encourage their best people to learn more and more about less and less (niche expertise), the “future” will see firms encourage their best people to learn more and more about more and more (generalist expertise). In a fast changing world, our ability to rapidly adapt our competence and passion to existing and anticipated market needs, will determine our success or failure.
  • We have more communication tools in business today than at any point in the past, yet we have more people who know less about the range of competencies a firm has and its’ ability to provide tremendous results for its’ client base.
  • Most corporate organisations talk about life-balance and the steps they have undertaken to improve their employees’ lives in grand sweeping statements. The reality is that few employees have truly found the correct balance for long. Why? The initiatives are largely reactive, not proactive.
  • We have become addicted to “high tech” (online, social , mobile, desktop) but we have rarely integrated it well with “high touch” (a seminal customer experience). Those few firms that have been successful are largely to be found in the consumer retail space (Apple, Uber, Citimapper, Spotify). How many firms that serve corporate customers can you put in the same category?
  • Our use of technology is increasingly passed off as an excuse (“I didn’t see you there”) for a lack of manners and human kindness (public transport in London, New York, Paris, Hong Kong). We are increasingly allowing ourselves to be unhealthily selfish to one another, yet we are choosing to live and work in greater numbers and closer proximity to each other. Something has to give.
  • When you last received a written thank you letter or a note of appreciation, did its’ rare occurrence,  create  a far more lasting impression and an urge to prioritise a future time and date to meet again? When we want to create impressive entries into important prospects, clients, clubs or associations, sometimes we need to look back, not forward in how we choose to communicate with those individuals if we want to stand apart from the crowd.
  • Our decision to “hide” behind email, has more to do with our own fears and less to do with the fact that we will elicit a timely and positive response. If business leaders and employees don’t address the cause of that fear, we increasingly dilute our productivity and our own “worth” to the firm and our clients’ future.
  • We have created more titles in firms today than at any point since the beginning of not WWII but WWI. Yet understanding the value that individual brings to bear on the prosperity of the firm and its’ clients is with rare exception less easily understood by a firm’s key constituents (customers, shareholders, business partners, employees) than at any point in the past. The net result, is that the investment in establishing people’s credibility with those people it wishes to influence, has never been higher. Almost all mid and large-sized businesses could eliminate 20% of all titles, the associated pay and perks, and the impact would be immense and immediate on the bottom line. It doesn’t happen largely because the ego and belief systems of top management won’t allow it to happen.

© James Berkeley 2014. All Rights Reserved.

Focused Client Acquisition: The 3 “i”s

August 21st, 2014

When we talk about geographic markets representing high growth opportunities (“China represents the biggest opportunity of yours and my lifetime”, Andrew Cosslett, past CEO of global hotel chain IHG), I sense all too often  we confuse the listener and obscure the actual opportunities. In reality, the growth environment (macro: government policy, taxation and micro: education, wealth, mobile phone usage, productivity)  and the abundance of opportunities is very specific to certain regions or cities. The same happens when we talk about the products or markets we serve, the customers we intend to focus on and the industries we assume represent the most attract opportunities.

For example, Italy might be considered by many international investors and corporate executives, a country immersed in excessive public and private debt, political ineptitude and largely an ageing, unproductive workforce. Yet scratch below the surface and take a look in Northern Italy, particularly in or around Milan, and you find some great businesses (mechanical, food, fashion and so on) with tremendous growth potential. As the  President of a successful local bank, Banca Di Piacenza, reminded me today that potential may increasingly be in international markets and appeal more to foreign companies or private equity investors but they are far from the “basket cases” that many in the international media might present.

I think we need to think about, talk about and act on growth market opportunities with more of a “laser focus” (3″i”s):

Ideal Client: in a corporate organisation, who are they by name, title, position of influence, control of budget? In a retail business, what level of education, wealth, technological prowess, aspiration, affiliation and buying habits sets them apart from others?

Ideal Influence: where do they hang out, who do they listen to, who do they take advice from, what do they read, who do they aspire to be, who do they see as peers and so on

Ideal Timing: where are they most comfortable, where are they least distracted, when do they have most “free” time, what changes present the best opportunities, when can we predict they are looking for help, when are we best positioned to address the need

I confidently predict that if you take any current marketing plan or list of high potential buyers and apply the laser focus, you will surprise yourself by the dramatic impact on your top line revenue growth, the reduction in client acquisition overhead (time and money) and the bottom line (the flow throw from your marketing spend into cash in the bank). You will thank me many times over.

© James Berkeley 2014. All Rights Reserved.

The Big Myth About Long Term Incentives and A Cultural Change In The Boardroom

August 13th, 2014

I admire risk takers. They perform an essential service for those in the business of transferring risk. Whether it is insurers assuming risk from their customers, reinsurers assuming risks from insurers, investment banks and institutional investors assuming risk from publicly traded businesses or bookmakers accepting risk from their customers. I think those that work in that arena are mostly following their passion.

What I detest are those that call themselves “risk takers” and who are running a business but actually don’t take any risk. In effect they are traders with no discernible “skin in the game”. They are asking for the respect that is accorded to someone, who puts their balance sheet at risk but are in fact quietly skimming a dollar, a pound, a euro or a yen off other parties who have the cojones to price and assume risk. All that I ask is that people are honest about their own “worth” and the value they provide (or dramatically) create for others.

The same applies with people in corporate organisations with over bloated egos, who demand the perks of entrepreneurs and shareholders with ACTUAL money at risk.  I am reminded of this when I see demands made of shareholders by top management  to support inflated long term incentive rewards, where there is visibly little or no personal risk (downside). So many of these arrangements set “targets”, which hardly stretch the executive to achieve a generous award. Complicit advisers happily create a pretext for toothless remuneration committees about the “need to attract world class talent that can produce results” and earn inflated fees, largely based on hourly billing. In other words, the longer they take to design, facilitate and implement a LTI arrangement the better off they are, in total conflict with shareholders’ interests, which best served by a quick solution. If the time, energy and effort was re-directed towards how top managers intend to produce results rather than reward results, shareholders would be exponentially better off. My point here is where is the accountability for top managers, Remuneration Committees, the plans they promote and the advisers they hire.

Yes, there are the headline cases where institutional investors “push back” but they resemble a fisherman casting a rod, not a fishing net to eliminate the abuse. My suggestion? Any LTI plan and those engaged to advise or approve the arrangement must meet these criteria:

  1. No plan pays out any benefit for “performance in line with target expectations”. The Manager get his salary and benefits, nothing more.
  2. Where “performance is below expectations”, the Plan has a clawback provision against any other accrued executive pay or benefits  upto 20% of the total amount received, which is “at risk” for upto 36 months after leaving service with the firm or a date to be agreed
  3. Benefits paid out for “out-performance” are only paid to those achieving top quartile results and behaviours. Objectives, measures of success or progress and the value created in meeting or exceeding those expectations are conceptually agreed in advance with shareholders . They are transparent for all shareholders.
  4. No Adviser is allowed to bill hourly fees. Their remuneration is in the form of a value-based fixed fee providing a dramatic return for the organisation and fair and equitable compensation for the practitioner.
  5. No Remuneration Committee Chair or Board Member is allowed to serve more than one term. They can only sit on one Company committee, at any one time. They are only electable based on a combination  of expertise and experience directly linked to the existing and anticipated market needs of the business and their ability to attract managers with the requisite skills and behaviour. No jobs for the boys!

I confidently predict a dramatic improvement in business results with the application of greater focus and discipline and shareholder resolve to see their interests best served by these arrangements.

© James Berkeley 2014. All Rights Reserved.

An Interview With Me From the Global Delivery Report

August 11th, 2014

The business process outsourcing “meeting place” for businesses in Mexico, Uruguay and beyond, has interviewed me here: Learn about the critical shift to “near-shoring” and the future impact on local and international businesses.

http://globaldeliveryreport.com/bpo-tide-still-appears-to-be-turning-to-nearshore/

 

When Your Time Has Come

August 11th, 2014

Timing is key to success for executives and entrepreneurs. Yet most of us rarely chance upon the “perfect” time. We tend to think in business of two dimensions: “market readiness” for your product and service and “business readiness” for the increasing “market need”.  Yet we largely overlook the third dimension, “personal readiness” in the corporate world. When we do think about the latter, we tend to think in negative tones. We keep score and loudly chastise our self and our colleagues for our failures (“we weren’t ready”, “the timing was all wrong in hindsight”, “we should have seen the obstacles”). Overlooking largely those things that we omitted to do (failed to make a speedy decision, relied on a phone call rather than a personal visit with the prospect, spoke to the wrong people, applied ineffective due diligence and so on). For example, I was listening to a radio reporter berating Tiger Woods for returning too early on the PGA Tour from a chronic back injury last night, and stating that his urge to return too soon “stinks” for his fans and the general media, who want to see a genuine rivalry with Rory McIlroy. The inference being that his “ego” and his goal of chasing down Jack Nicklaus’s majors record was overriding common sense. Another reporter posed the question, when have you ever heard someone say they came back too late, in professional sports.The real answer, of course, is no one ever knows the right time, it is largely a matter of art and science. Not even the “after-timers” (commentators, pub bores and so on), who have never been successful themselves.  

The “art”, I am referring to, is the self-confidence in your talent and performance and the “science” is your consistent physical and mental ability to hit the required shot with the right level of precision.   The same applies in business, whether it is your “personal readiness” to accept the promotion, successfully compete for larger clients, to enter new markets or to attract smarter people to your business.  My observation is that what separates the “best” from the “ordinary” or the “lousy”, is largely those people who consistently show good judgement (balancing risk and reward) and the application of common sense (removing the emotion from the logical decision-making process). Unless the risks are catastrophic for you personally and for your business, if you are 80% sure or more that it is the right call, make the investment, accept the opportunity or enter the chosen market. Then run like mad. Racehorses after all are taught in pre-training to mentally ready themselves for race day, and when the starting gate flies open, they surge forward. Why cannot we teach ourselves in business to do the same, once we have committed to go ahead? After all, what ACTUALLY is the worse that can happen? You will be surprised by how little, not how large, the consequences are on your future personal and professional prospects in most cases. 

© James Berkeley 2014. All Reserved.

 

The Ingredients of Luxury Success

August 7th, 2014

Why do luxury brand launches reveal so little about the power of the brand and so much about the appropriateness or not of the people tasked with running the business? If the intent is to create a new market-leading customer experience, then we should first increase our own chances of identifying the “ideal leaders and employees” with the right skills (brand creation) and volition (open-minded, entrepreneurial). That is rarely accomplished by limiting the search to a big or established brand within the sector.

I was reminded of this a few months back with a wealthy Asian family, who have splashed US$140 million transforming  a luxury hotel business. Great thought has gone into the “ideal customer” and the sensory experience. Young, enthusiastic hoteliers abound alongside one or two seasoned luxury hoteliers. Yet impressive interiors, and a friendly welcome cannot masquerade the significant challenge drawing a well-informed, super-wealthy leisure and corporate crowd to an unfashionable corner of London with little obvious excitement on the doorstep.  Meet the hotel leader and the sales and marketing manager, and you are immediately struck by the massive disconnect between their “past” and their probable ability to transform the property’s immediate “future”. Particularly one highly dependent on maximising “premium” suite occupancy (creating a siren call not a whimper to the property). Dig a little further and you find their past success has largely come from a “market need” (leveraging an established luxury brand’s equity), a ”competency” (attract and deliver a competitive luxury hotel experience) and a passion (understated elegance). When you are working in world-famous businesses or luxury brands those skills and behaviours make great sense. When you have a small brand in an experimental location seeking to attract highly discerning customers, you need an entirely different set of leadership skills and volition.

Key Tip: Just because an individual has been a “star” in a top-ranked business, don’t be blindsided by his or her “past”. Focus on your firm’s immediate future and ask yourself, what skills and behaviours do we need to achieve our desired results? If you are a young or largely unknown luxury brand that must punch above its’ own weight in order to attract your ideal clients, it is by exception, not the norm that you will find the “right” people in established businesses within your sector. Counter-intuitively, the longer the tenure they have spent in an established brand, the less their probable “worth” to you. 

© James Berkeley 2014. All Rights Reserved.

   

 

 

 

Technology Before The Customer, The Customer Before Technology

August 7th, 2014

Do we know the limits of where high tech can help businesses flourish? A visit to Denmark and Sweden reminded me how whole countries and businesses continue to struggle with the convergence of technology and  a great customer experience.

  1. SAS in their infinite wisdom construed to lose a family member’s bag for 72 hours in transit from Helsinki. As a customer, your sole point of contact is an online portal, which is unbelievably ineffective. There is no human you can speak to, and unless you wish to be permanently tied to your iPhone, you might as well buy replacement clothing and so forth and bill the airline for the inconvenience.
  2. A trip to an ice cream kiosk adjacent to the beautiful white sandy beach in Falsterbo, sees a pretty twentysomething blonde girl ask for a credit card rather than cash and you wait interminably for a connection to her iPad payment system to authorise payment. You are lucky if the sprinkle laden cornet has not dissolved in your lefthand while you are forced to digitally sign with your right finger for the 30 Kronas  payment. C’mon there is convenience shopping but this is a geek’s joke. 

In your own business, do you start with a visual picture of the ideal customer or client experience (what does it feel, sense, sound or look like)? Are you clear about the ideal mode of communication (in-person, phone, email)? Are you clear about the ideal time (pre, during, post-sale)? Are you clear about the value derived for the end user from human interaction, technology or a combination of both (speed and quality of resolving issue or transferring knowledge)? Far too often it seems businesses are falling in love with the technology and the “service theory” first without thought to HOW the customer or client is better off or better served in the real world.

© James Berkeley 2014. All Rights Reserved.

All Hands On Deck

July 31st, 2014

 

 

 

 

 

I was reminded last weekend about the importance of preventative and contingent actions to sustain profitable growth and the uncertainty all managers must navigate through. When a crisis happens, there are leaders and businesses who excel (Johnson & Johnson) and others, who fail very publicly (UBS, RSA, Malaysia Airlines). Organisations prepare for the impact of natural disaster (wind, fire, cyber risk management and catastrophe insurance), what scuppers so many firms and for which they prepare so poorly, is for human failure (poor assumptions, fraud, corruption, greed, mismanagement etc).

In Hollviken, Sweden I chanced upon a group of “Vikings”, a modern day version of the 1958 film cast starring Kirk Douglas, Tony Curtis, Ernest Borgnine, and Janet Leigh, trudging disconsolately off the quay. Upon closer investigation, reality was stranger than fiction. This modern day group of Vikings had  sunk their boat in the neighbouring Canal on route from a neighbouring Vikings museum. With the help of a modern day pleasure craft and their crew, and the brawn of a few hardy Viking men they literally dragged their boat to safety with ropes.  All within one hour. There are four attributes, any business and manager charged with growth must excel at:
Vikings long walk

 

 

 

 

 

 

1. Reduce effects of the crisis first and rapidly 

Vikings sinking ship

 

 

 

 

 

 

 

2. Find the cause of the problem, don’t cast blame

Vikings to the rescue

 

 

 

 

 

 

3. Tell people what happened and get external, qualified help

Vikings nearing safety

 

 

 

 

 

 

 

4. The Leader is the last to leave the boat, his behaviour is an example to his key constituents

In the real world, there are real and perceived crises. There is the loss of a key client who is central to your growth plans. It is painful but it is not a crisis. However a regulatory decision that leaves a mid-sized business liable for a multi-million or billion dollar, euro or pound claim settlement, has a genuine crisis on their hands.

© James Berkeley 2014. All Rights Reserved.

 

Brands Lost In Translation

July 31st, 2014

In beautiful Falsterbo in SW Sweden, a hilarious reminder last week that common sense in one language can be nonsense or even comedic in another. How early, if at all, in your new market entry process do you “road test” your brand names when moving into a new geographic market? This might be water off a duck’s back in consumer retail but you will be surprised how many business in other sectors (financial services, insurance, gaming, luxury) overlook this simple and costly step. Don’t fall into this trap. 

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